ELRON - INVESTOR PRESENTATION...This presentation is for information purposes only. By this...
Transcript of ELRON - INVESTOR PRESENTATION...This presentation is for information purposes only. By this...
June 2019
ELRON - INVESTOR PRESENTATION
This presentation is for information purposes only. By this presentation, Elron does not intend to solicit offers to purchase itssecurities and the presentation does not constitute an invitation to receive such offers, and nothing said therein constitutes a“public offering”, as defined in the Israel Securities Law, 5728-1968.Some of the data in Slide 17 of this presentation that refer to the Company’s share in holdings (in the group companies presentedtherein) based on the value of the last financing round were first included in the presentations the Company makes public after itslast annual reports were issued.Elron may make improvements and/or changes in the features or content presented herein at any time. Elron shall not be liable forany loss, claim, liability or damage of any kind resulting from the investor's reliance on or reference to any detail, fact or opinionpresented herein.The presentation is not intended to provide a comprehensive description of Elron's activities, and Elron urges investors to considerthe information presented herein in conjunction with its public filings including its annual and other periodic reports.Nothing in this presentation should be considered "investment advice", as defined in the Israel Regulation of Investment Advice,Investment Marketing and Portfolio Management Law, 5755-1995.Certain statements made over the course of this presentation may be forward-looking in nature, as defined in Section 32A of theIsrael Securities Law, 5728-1968. Such forward-looking statements involve known and unknown risks, uncertainties, forecasts,assessments, estimates or other information, which relates to a future event or matter whose occurrence is not certain and whichis not within the sole control of Elron, and other factors which may cause the actual results, performance and achievements ofElron to be materially different from any future results, performance and achievements implied by such forward-lookingstatements. These forward looking statements are not proved facts and are based on Elron's subjective assessments which rely onanalysis of general information, public publications, researches and reviews, which do not include any liability as to theaccurateness or completeness of the information contained there and their accurateness hasn't been examined by Elron. Therealization of these forward looking statements will be affected by factors that cannot be assessed in advance and which are notwithin the control of Elron. Elron assumes no obligation to update the information in this presentation and disclaims any obligationto publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions,or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ fromthose set forth in the forward-looking statements.These estimates, in whole or in part, may not materialize, or may materialize in a manner materially different than expected. Theprincipal factors that may affect this are developments in Elron’s and its group companies’ fields of operation; failure to meet goals;inability to realize technologies; delays or malfunctions in development or manufacture; inability to obtain financing; modificationsin technologies; modifications in work plan, goals and/or strategy; failure or delay in recruiting patients for clinical trials; interimanalysis results; clinical trial results and analysis thereof, which may alter their implication on the regulatory pathways to bepursued for marketing and reimbursement approval of products around the world as well as the actual filing of marketing andreimbursement approval applications; feedback from the medical and scientific community; failure to obtain regulatory approvals;guidance and determinations by regulatory and insurance authorities; or if any risk associated with Elron and its group companiesand the course of product development, clinical trials and their results, data analysis and/or regulatory filings occurs.All amounts are fully attributed to Elron and RDC unless specified otherwise.
COMMENTS
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1960sDefenseElbit
1970sMedical Imaging
Elscint
1980sSemiconductorsOrbotech | Zoran
1990sCommunications
Netvision | Partner
2000sMulti-strategyGiven Imaging
2010sMedical Devices
Medingo
2020sCyber/IT
BUILDING VALUEIN VENTURE CAPITAL INVESTMENTS
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Experienced team leading the company over the last decade
10 exits totaling $1.5b,
including proceeds in excess of $500m for Elron and RDC
Long-standing focus in the medical device field
$140mcumulative
dividends since 2012
A portfolio of companies in which
we invested $185m
Successful entry into the cyber/IT
space
BUILDING VALUE IN VENTURE CAPITAL INVESTMENTS
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BALANCED MATURITY BETWEEN INITIAL R&D STAGE START-UPS THROUGH COMPANIES IN ADVANCED STAGES
MEDICAL DEVICESElron’s field of focus in the last decade
Current portfolio:
6 companies, in which a
total of $390m was
invested
~$150mby Elron
& RDC
4 exits
in the last decade generating $466m in
proceeds for Elron & RDC, reflecting a 2.6x multiple on investment
NEW VERTICAL IN THE LAST 3 YEARS
Current portfolio:
11 companies, in which a
total of $122m was
invested
~$35mby Elron
& RDC
2 exits
in the last 2 years generating $35m in
proceeds for Elron & RDC, reflecting a 3.25x multiple on investment, in an avg. of ~3 years
CYBER/ITDeveloping the field for the next decade
TEAMWORK
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An experienced team which led 10 exits, dozens of investments, and follow-on financings totaling hundreds of millions of $s over the last decade
ZOHAR ROZENBERGVP Cyber Investments
Col. Ret. Headed the IDF’s Cyber Division in the Intelligence Corp 8200 unit. Established Elron’s cyber portfolio and successfully led the investment and exit of Secdo in 2018. Has been with Elron since 2016.
ZVIKA SLOVINVP Medical Devices
Broad experience in the medical device space as an entrepreneur and investor. Led Elron’s investment in Medingowhich was successfully sold to Roche in 2010, and the investment and sale of Sync-Rx and Kyma. Has been with Elron since 2008.
YARON ELADCFO
Extensive finance experience. Established and manages Elron’s portfolio of IT investments. Led Elron’s investment in Cloudyn which was successfully sold to Microsoft in 2017, and the sale of Jordan Valley and Safend. Has been with Elron since 2007.
ARI BRONSHTEINCEO
Extensive experience in managing and investing in hi-tech companies. Served as a director in several large companies, including CellCom, Hadera Paper, Maxima, and Given Imaging until its sale to Covidien in 2014. Has been with Elron since 2009.
EXITS AT A VALUE OF $1.5B
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Sold to ROCHE
May 2010
July 2017
Sold to MICROSOFT
Apr. 2018
Sold to PALO ALTO NETWORKS
Oct. 2015
Sold to BRUKER
Sept. 2015
Sold to ZOLL
Nov. 2012
Sold to VOLCANO
Nov. 2011
Sold to ALVARION
Feb. 2014
Acquired byCOVIDIEN
Sept. 2011
Sold to WAVE SYSTEMS CORP
June 2010
Sold to ENABLENCE
Including RDC
Our share in proceeds
$550M
AT THE PIVOT OF OUR ACTIVITY
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CARTIHEALImplant for cartilage and bone
regeneration in load-bearing joints
Total investment
in company:
$51m
$17m(29%)by Elron
FOUNDED: 2009OUR FIRST INVESTMENT: 2012
MAIN PARTNERS: Johnson & Johnson, Accelmed, aMoon, Bioventus
BRAINSGATEElectrical stimulation-based treatment
for ischemic stroke
Total investment
in company:
$97m
$29m(30%)by Elron
FOUNDED: 2000OUR FIRST INVESTMENT: 2005
MAIN PARTNERS:Johnson & Johnson, Medtronic, Boston Scientific, Pitango,Cipio Partners
OPENLEGACYAutomated API integration platform that speeds digital transformation
Total investment
in company:
$37.4m
$8.2m(29%)by RDC
FOUNDED: 2013OUR FIRST INVESTMENT: 2014
MAIN PARTNERS:CommerzBank, Cardiff/Cathay, OG Tech, Leumi Partners, Prytek, Silverhorn
12 months post-op6 weeks post-op3 weeks post-op
8This slide contains forward-looking information as defined in Section 32A of the Israel Securities Law, 5728-1968. See Slide 2 of this presentation.CartiHeal’s system is an investigational device in the U.S., not approved for marketing there.
Cartilage injuries affect millions of patients worldwide. The need for a simple, fast, and off-the shelf solution to restore cartilage is an unmet challenge facing medicine today.
CARTILAGE & BONE REGENERATION IN JOINTS SUCH AS THE KNEE
>400 patients were treated to date with the implant in a series of clinical trials
CE mark in hand with a broad indication allowing for sales in Europe
In Sep. 2017 a pivotal clinical trial was initiated for FDA marketing approval of the implant in the treatment of traumatic and osteoarthritic defects in the knee: ~190 patients enrolled to date
IN THE NEXT YEAR: After 250 patients are enrolled, an interim analysis of the trial’s results will take place
The annual number of new ischemic strokes in the USA is approximately700,000. The current treatment for stroke is very limited.
ELECTRICAL STIMULATION-BASED TREATMENT FOR ISCHEMIC STROKE
In Mar. 2018 the company completed the largest stroke trial ever done: 1,000 patients, treated on average 19 hours after stroke onset
MECHANICAL THROMBECTOMY:clot removal or aspiration with a catheter
~5% of stroke patients undergo the procedure
IN THE NEXT YEAR:The company intends to submit an application for FDA marketing approval
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Trial results among cortical stroke patients (50% of the trial population*) demonstrated that SPG stimulation:
reduced disability
reduced the no. of dependent pts. by ~1/3 compared with the control group
This slide contains forward-looking information as defined in Section 32A of the Israel Securities Law, 5728-1968. See Slide 2 of this presentation.BrainsGate’s system is an investigational device, not approved for marketing. * BrainsGate estimates that ~25% of ischemic strokes are cortical.
tPAclot-busting drug
~7% of stroke patients receive tPA
In May ‘19, the FDA trial results were published in the scientific journal The Lancet
10ImpACT-24A: Randomized clinical trial that enrolled 300 patients during 2009-2011ImpACT-24B: Randomized clinical trial that enrolled 1,000 patients during 2011-2018
BRAINSGATE’S FDA TRIAL RESULTS
PROFILE The longest clinically tested treatment window – on average, patients were treated 19 hrs after stroke onset
Performed by MDs (mostly neurologists)
EFFICACY Large effect size (9.7%) among cortical stroke patients, marginally missed statistical significance (p=0.0257)
Pooled analysis of ImpACT-24A & B showed a statistically significant (p=0.005) and clinically relevant benefit among cortical stroke patients
Neutral effect in general trial population
SAFETY SPG stimulation was safe across all patient groups
MODE OF ACTION
A strong dose-response relationship between stimulation level and patient outcomes was revealed (p<0.001)
ImpACT-24B: SPG stimulation started within 24 hours reduced disability in a broad category of cortical stroke patients (50% of the trial population)
PARTNERS:
11This slide contains forward-looking information as defined in Section 32A of the Israel Securities Law, 5728-1968. See Slide 2 of this presentation.
FROM LEGACY SYSTEM TO APPLICATION IN RECORD SPEED
Over 20 customers worldwide, including 1st-tier insurance & banking corps
Team of 100 employees, in 8 locations worldwide
The co’s first multi-million-$ transaction with a global banking customer (money transfer API production) demonstrated:
• API performance: 5x faster than existing solution
• >75% reduction in labor cost (20 vs. 120 FTEs)
• Multiple middleware products bypassed ($mn savings)
Raised $30m in financing round from leading strategic investors
IN THE NEXT YEAR:Leverage latest financing round to accelerate global sales
CYBER/IT
THE NEXT DECADE: CYBER & IT
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ZOHAR ROZENBERGVP Cyber InvestmentsOver 20 years of experience; previously Head of the IDF's Cyber Department; joined Elron in 2016 and established its cyber activities
YARON ELADCFOLeads the IT field; led the investment in Cloudyn which was successfully exited in 2017
LEADERSHIP INVESTMENT
$45mA total of 13 investments
to date
$60mbased on last
financing round in our 11
portfolio co’s
$35mproceeds
from 2 exits
RAFAEL (through RDC, a joint venture)Vast experience in technological projects, extensive knowledge in the cyber and IT spaces, well-established practice of serving as a design partner / beta site for group companies, and often as their first major customer
RAFAEL
CYBER & IT –GROWTH CATALYST IN THE NEXT DECADE
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Seed Round A Round B
Exit
Exit
TOP HEADLINES ON OUR CYBER/IT COMPANIES
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INVESTMENT PARTNERS
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Holdings in companies 1Book value at Mar. 31, 2019 ($m)
Our holdings based on valuation of last financing round 2 ($m)
Medical:
BrainsGate (27%) 1.6
CartiHeal (27%) 3.0
Pocared (55%) 8.8 35.8
Other medical companies 12.2 21.3
Total Medical Holdings 25.6 107.1
Total Cyber/IT Holdings 10.0 37.7
Others 5.8 6.5
Total Holdings 41.4 151.3
Contingent consideration and proceeds in escrow from sale of companies
2.3 2.3
Liquid resources (cash and marketable debentures) (as of May 31, 2019)
32.2 32.2
TOTAL 75.9 185.8
Price per share on TASE (in $) (as of June 3, 2019) $1.66
Elron’s market value (as of June 3, 2019) 49.4
~$185M INVESTED IN COMPANIES, ~$35M LIQUIDITY BALANCE, ~$50 MARKET CAP, NO DEBT
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1 Includes Elron’s direct holdings and its effective indirect holdings through RDC. Includes investments made after Mar. 31, 2019. Includes Elron’s balance and 50.1% of RDC’s balance.2 The amount includes: A) $96.6m calculated based on the “post-money” valuation of the last financing round in the companies multiplied by our fully diluted holding percentage. It is clarified that these are financing rounds that were carried out in different companies at different dates, and since which, in some cases, significant time has passed. In some of the financing rounds Elron and/or RDC opted not to participate; B) investments in companies presented at fair value in Elron’s financial statements totaling $18.9m (mainly Notal Vision and Aqwise); C) $35.8m attributed to Pocared based on a valuation determined with the assistance of an external appraiser as of Dec. 31, 2018 and which is included in Elron’s periodic report for 2018. 3 The above financial data do not represent a valuation, investment advice, or a financial opinion of any kind.
SUMMARY
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10 EXITSin recent years
~$220MTotal cash balance & investments in existing companies
IN THE NEXT YEARValue-building events in pivotal companies
This slide contains forward-looking information as defined in Section 32A of the Israel Securities Law, 5728-1968. See Slide 2 of this presentation.
MATURE PORTFOLIO OF COMPANIES
EXPERIENCED TEAMleading the company over the last decade
INVESTMENT OPPORTUNITY IN A PUBLIC COMPANY IN THE VC SPACE, PROVIDING THE WIDER PUBLIC WITH ACCESS TO PRIVATE START-UPS
THANK YOU.elron.com
OUR MEDICAL DEVICE COMPANIES
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POCARED
Rapid and automated microbiology laboratory system
Our investment:
$83m
71%by Elron & RDC
CARTIHEAL
Implant for cartilage and bone regeneration in load-bearing joints
Our investment:
$17m
29%
BRAINSGATE
Electrical stimulation-based treatment for ischemic stroke Our investment:
$29m
30%
NITINOTES
Minimally invasive endoscopic device for treatment of obesity Our investment:
$3m
31%
CORAMAZE
Transcatheter mitral valve repair system
Our investment:
€5.2m
36%
NOTAL VISION
Remote monitoring of patients with age-related macular degeneration Our investment:
$13.5m
14%
OUR CYBER/IT COMPANIES
SIXGILL
Cyber intelligence platform that automatically & covertly analyzes the dark web
22%
Our investment:
$3.5m
OPENLEGACY
Automated API integration platform that speeds digital transformation Our investment:
$8.2m
29%by RDC
CYNERIO
Protecting the connected medical device ecosystem from cyber threats
Our investment:
$2.3m
24%by RDC
IRONSCALES
Automated phishing prevention, detection & response platform
Our Investment:
$2.5m
24%by RDC
SECUREDTOUCH
Behavioral biometrics-based user authentication for mobile apps Our investment:
$4.5m
28%by RDC
KINDITE
Encryption platform that makes the cloud blind to data & encryption keys Our investment:
$2.5m
28%by RDC
OZCODE
Debugging-as-a-Service (DaaS) that cuts debugging time to minutes Our investment:
$2.5m
27%by RDC
SAYATA
Automated, AI-based cyber risk assessment solution for the insurance industry
Our investment:
$2.5m
21%by RDC
KZEN
Crypto wallet that doesn’t compromise between security and user experience
Our investment:
$0.9m
8%
ALCIDE
Universal security and management platform for hybrid data centers Our investment:
$3.9m
26%